A proposal to mine rare earths at a site north of Alice Springs has been given environmental approval with stringent conditions.

The Northern Territory Environment Protection Authority says Arafura Resources’ Nolans Project can be managed to avoid unacceptable impacts and risks over the mine’s 55-year life.

Arafura plans to mine rare earth elements, including neodymium, praseodymium, apatite, monazite and allanite, which are used in products such as wind turbines and the electric motors in hybrid vehicles.

In its 16 recommendations to the NT government, the EPA said mining waste, including naturally occurring radioactive material, should be permanently stored on the mine site.

The EPA has also expressed concern over the potential impact on groundwater and has offered proposals to deal with the eventual closure and decommissioning of the mine.

“This proposal comes with long-term environmental risks that will require a high level of ongoing regulatory scrutiny across,” EPA chairman Paul Vogel said in a statement.

The EPA said the mine’s operators should integrate mine closure planning with its operations to allow for progressive rehabilitation of the site. It says a bond should also be paid to ensure the rehabilitation’ costs were not left to the NT government should the mine be abandoned or the company become insolvent.

Within its recommendations and conditions, the EPA said the risks and impacts associated with the project could be avoided or sufficiently mitigated....

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Right now, the world is consumed with sourcing battery materials such as lithium and cobalt, but in order to produce the associated energy to charge these devices, REEs must necessarily be the next global mineral craze. We simply cannot continue to power the world with old dinosaur bones, and the wind turbines and generators of the future are to be built around permanent magnet motors. The Nolans resource is long-life and low-risk with planned output that can support more than three decades of production, meaning that the resource should come online during peak pricing and continue until after 2050.

Given that the majority of state and corporate promises to move entirely to renewable energy sources and electric vehicles focus on completion by 2040-2050, Arafura is in a very good position indeed. Additionally, the buyer trend at the moment is for longer term fixed contracts for NdPr supply in almost unanimous anticipation of continued price escalation into the medium term, so customers will not be difficult to come by. NdPr as a segment is expected to have a CAGR of around 8% or more through to 2025, but personally, I think this will become an accelerating growth rate from around 2021. Arafura stock is currently trading at AUD$0.084, an absolute bargain considering the next decade will likely see Australia become a global leader of REE exports.

Higher near-term neodymium and praseodymium oxide prices will provide a significant boost for late-stage rare earth exploration companies – particularly those with a high level of potential revenue exposure to neodymium and praseodymium oxide, along with heavy rare earths used in high-grade NdFeB permanent magnets, such as terbium and dysprosium.

Such companies and projects include, among others, Peak Resources and its Ngualla project; Mkango Resources and its Songwe Hill project; and Rainbow Rare Earths and its Gakara project, all in Africa. In Canada, CREE companies to watch include Commerce Resources and its Ashram project; Matamec Resources with its Kipawa project; and Search Minerals with its Foxtrot project, in Canada.

Greenland Minerals & Energy is also advancing the Kvanefjeld project, in Greenland, while Minera BioLantanidos is advancing the El Cabrito project, in Chile. Other notable projects include Alkane Resources and its Dubbo project; Arafura Resources and its Nolans project; and Northern Minerals, which is developing the Browns Range, all located in Australia.

The latest pricing information has neodymium-praseodymium (“NdPr”) oxide FOB China, atUS$73.30/kg. Prices are now at their highest levels since before China removed its exportrestrictions on rare earths in May 2015. NdPr is the main product Arafura anticipates producingfrom its 100%-owned Nolans project and NdPr price is the key driver of Nolans projecteconomics.

About NdPr

NdPr is in short supply globally and isthe critical raw material in the manufacture of ultra-strong,high-performance permanent magnets, which are used extensively in the automotive industryfor electric components such as seats, mirrors, wipers, steering and braking.

Importantly, the compound has also emerged as a key enabler of hybrid and electric vehicles ashigh-performance magnets play a key role in electric traction motors. While traditional petrolor diesel combustion engine motor vehicles each use approximately 0.7 kg of NdPr oxide,electric or hybrid vehicles require an additional 1 kg.

The increasing shift towards hybrid and electric drivetrain technologies among the world’sleading automotive manufacturers is expected to continue to positively influence marketfundamentals for NdPr.

The demand for NdPr oxide is expected to grow at 8% per annum to 2025 from current globalconsumption of 33,340 tonnes.

About 12 months ago I posted on a company called MTB. Somebody had put up a question. The point of the story is they had a decent resource but absolutely no cash, and I felt really sorry for anyone still holding.

Sad thing is ARU is heading in the same direction. A decent resource, years and millions invested in research on how to develop it, but not enough cash and apparently very little interest from anyone not actually on the payroll.

In a couple of years the kitty at ARU might have run dry, the buy side might have dried up and sellers might be queueing to offload at $0.001. Sadly, I am still holding - another example of my falling victim of the RE hype 3 years ago.

I think I said on GGG that until LYC either goes broke or turns a profit undeceloped RE resources with be something of a financial quagmire. I just wish I wasn't such a blithering idiot, climbing on a bandwagon, just as sensible people were getting off it!

I'm posting this largely for my own benefit because many resource tables use chemical symbols and the Lynas pricing table uses full names. Being a tad slow, I need hand holding to link the two. It is the front page of a recent Arafura presentation.

In January, ARU looked promising because, on the weekly chart, it wanted to form a round bottom:

That has since broken down, and although a pre-alert is now showing on the Daily, I want to wait till the 3-month downtrend is overcome (assuming it will be.)

But at least it's good to know that the fundamentals seem to stack up as well. No sovereign risk here - yet.

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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)

This slide was released in a presentation today. I like it because it shows info on all 4 ASX quoted rare earth cos (of interest to me) side by side with others around the world in an easy to read format.